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Burberry: Exane keeps 'neutral' stance.

(CercleFinance.com) - Exane reiterated its "neutral" rating on Burberry, with a target price of 1,650 pence, being inclined to "err on the side of caution" regarding the stock.

The French broker said that being positive on the shares today requires an assumption that a major new designer appointment is about to be made.

"Yet, even if this were so, it would likely take 12 months before the new designer is on board and active - in a context where profit generation is guided to move sideways," it wrote in a research note sent to clients.

Hence, buying the shares today is close to buying an "option" that CEO Marco Gobbetti will be able to strike gold in his search for new creative talent, the broker says.

While Exane sees improved risk-reward in the shares today, the broker says it also anticipates "better entry points" down the road - especially if sector rotation were to hit luxury goods.

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